3 Mortgage Terms You Should Be Familiar With
It’s necessary for you to understand the basic mortgage or home loan terms so that you can make informed decisions. There are several mortgage terms that you’ll frequently come across while researching on how to refinance a housing loan in singapore. These are the common terms that you should be familiar with:
When you apply for a home loan, the bank will not provide the entire amount needed for the purchase. It will offer up to eighty percent of the total amount, leaving you to arrange the rest. The first five percent is mandatory cash and you can either make the rest of the fifteen percent in cash or cpf payment.
The lender from whom you’re taking the home loan will issue you an offer letter. You will also receive one, even if you’ve opted for a housing loan refinance scheme in Singapore. The letter comprises a few details, such as:
● The amount of the loan
● The interest rate
● Floating rate or fixed rate of interest
● Tenure of the home loan
● Details of any scheme (if applicable)
● Other terms and conditions
Before sanctioning the loan amount that you’ve applied for, the bank will look into particular information. It will inspect whether you’ve already taken any loans in the past, the amount thereof and the tenure of repayment. Furthermore, your age, income, job, work experience, savings etc. are also considered before sanctioning the credit. This process is known as credit assessment.
If you choose to refinance your housing loan, these terms may still be significant to you as the new lender will consider you as a new customer, and you may have to go through the legal & financial paperwork again.